Florida Medicaid legislation may be flexible than old times | Searcy Law

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John Hopkins

Will Florida Medicaid Legislation Take Us Back in Time?

» Written by // June 3, 2011 //


In the ‘80’s and ‘90’s we went through the “managed care” development in health care. HMO’s sprang up from everywhere and the promise of lower health costs with increased quality of health care was predicted by both the private sector as well as public officials.

That was a “sales job” by health insurers and healthcare providers who believed they could maximize profits by controlling what medical treatment they would permit people to receive. It was a shadow of the insurance company procedure of deny claims and deal with the fall out later. The problem was that with managed health care, insurers were often dealing with the health, the lives and, sadly, the deaths of patients unfairly denied certain medical treatments or simply who suffered more because of slowed provision of necessary treatment.

During that managed care experiment, insurance companies and health care providers flourished, but many physicians found great fault with the system. In 1996, an article published in the ACP Internist Journal identified 10 serious flaws in the system, including:

  1. Medical loss ratio. The fact that managed care corporations define the money they spend caring for patients as the “medical loss ratio” epitomizes how the needs of sick patients are pitted against the profit-seeking nature of these plans. Health resources should be used to serve people, not siphoned off for multimillion dollar corporate salaries and profits.
  2. Recent reports from the Medical Outcomes Study and the Robert Wood Johnson Foundation show significantly worse access, satisfaction, and outcomes for the poor, sick and elderly in managed care. These figures warrant careful scrutiny before we push more patients—particularly vulnerable Medicaid and Medicare patients—into managed care plans.
  3. Primary care physicians’ relationships with patients and specialists are repeatedly disrupted. Patients with a definable disease risk being “carved out” to an asthma, diabetes or a schizophrenia “disease management” factory.4 Physicians dealing with armies of corporate utilization managers spend millions of hours chasing approvals, correcting inappropriate denials and dealing with conflicting formularies, all of which leads to skyrocketing administrative costs.
  4. Primary care needs to be structured to preserve the physician’s role as a trusted patient advocate. How can patients feel reassured by their physician’s decision not to order a CT scan for a headache when they know he is being paid to deny the test?
  5. Because most patients and providers have been forced into managed care arrangements under duress, exam rooms are increasingly filled with angry patients and stressed physicians.
  6. Restricting patients’ options takes away their strongest quality leverage—choice. The business ethic makes managed care organizations accountable to corporate stockholders, not the public or patients. It’s hard for a patient—much less a physician—to go head-to-head with these increasingly powerful organizations.
  7. Physician organizations are less and less often confronting the contradictions of managed care and are instead fearfully scrambling for the best deals. Academic medical centers have compromised their leadership role in medicine to become players in this new game.

Now, Florida is presented with a resurgence of same failed system of managed health care. This time the application is limited to the elderly and the poor; arguably some of the most vulnerable of our citizens. Bills passed by the most recent summit of Florida’s legislature (HB 7107 and HB 7109) not only resurrect the failed managed care model, they also provide health care providers with special caps on damages for negligence. Why?

One of the things that hurt the previous managed care attempts was patients who refused to be unfairly abused in silence. Those patients sought justice in the courts for unwarranted denials of claims and inadequate medical treatments. Predictably, physicians testified in many of those cases that it was the managed care companies who were actually limiting necessary medical treatment and, as a result of this struggle to maximize profits over care, insurance companies were required to compensate some injured and killed victims.

So, the legislator who spearheaded this legislation engineered into it protections for the health care providers. The inclusion of these caps on damages is presumably to encourage health care providers to be a bit more “flexible” when managed care refuses recommended treatment to patients and to be more conservative in the care recommended in the first case.

Interestingly, the bills limit profits for managed care providers to no more than 5% and anything in excess of that must be paid to the state. As a result, almost before this legislation boosted upon seniors and the poor can even get off the ground, several managed care providers have opted out of the program; saying they could not make a profit.

Based on the disastrous experience with managed care over the years, maybe no companies will believe they can make a profit and the law will “die on the vine”. More likely, this new law will have done nothing more than to attract substandard providers who will deliver less than quality care. The Florida legislature may have done nothing more than placed its most vulnerable citizens at risk of their health and well being.


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